Survey results indicated that ATA members and their students were making important contributions with their involvement in VITA and other pro bono tax services by providing high-quality assistance to tens of thousands of taxpayers. An executive summary of the survey results is available online at aaahq.org/ata/public-interest/reports/ATA-Pro-Bono-SurveyReport-March2005.pdf. For an article by ATA task force members, see Bauman et al., Campus to Clients, “Pro-Bono Tax Services: The Role of Tax Academics and Students,” in the August 2005 issue of The Tax Adviser.
ATA Best Practices Study and Methodology
In October 2007, the task force made available to ATA members an online VITA best practices survey, which remained open for approximately three months. Sixty-nine people who were actively involved in VITA programs responded to the survey. They answered a series of closed-ended questions and provided more than 500 responses to a variety of open-ended questions. The survey results contain many facts, tips, and comments regarding VITA best practices that should be quite useful to tax educators involved with, or considering involvement with, a VITA program. A report summarizing the survey’s findings is available online at aaahq.org/ata/public-interest/reports/VITA-Best-Practices-Report_Oct07.pdf.
This section summarizes responses to both the closed- and open-ended questions in a variety of key VITA areas.
Training: Because of the newly required certification process for VITA volunteers, the training process has taken on added importance. Faculty members do all or part of the VITA training at more than 70% of the programs. Many programs also use IRS personnel or tax professionals as trainers. About one-fourth of the programs use two or more types of trainers.
More than 70% of the programs use IRS print and/or online training materials. More than one-third of the programs use faculty-prepared materials, while nearly two-thirds use two or more types of training materials. See Section 19 of the October 2007 report for a list of IRS materials available for VITA programs.
Many respondents also suggested that faculty members or IRS staff conduct the training. Some respondents commented that only students who have completed the first tax class should be volunteers. In addition, many VITA respondents emphasized the value of hands-on experience.
Testing and certification: The IRS requires that all VITA tax return preparers, instructors, and reviewers be certified by passing an IRS (or IRS-approved) test. Nearly all programs use IRS tests, with about an even split between paper and online tests. A few respondents did not feel that the IRS certification exam was illustrative of the types of issues that volunteers will encounter at the VITA site.
Site location and program promotion: There is a link between the location and the promotion of VITA services. In general, programs offer their VITA sites in high-traffic centers for target populations. More than half of the VITA sites are on campus. About one-third operate sites off campus only. These sites include public libraries, senior citizen centers, and community centers. Convenience for the clients is important. Being near public transportation or having adequate parking were both considered important criteria for site selection. Newspapers, both public and student, and posters were the most commonly reported means of promoting the VITA program. Once the site is established, word of mouth from satisfied customers supplemented with newspaper announcements and posters are generally all that is required to generate enough business for the site.
Administering the site: About two-thirds of the programs do not take client appointments. Having walk-in clients works well because there are limited staff resources for making appointments and it results in less downtime for volunteers. The major advantage of requiring appointments is that it avoids possible long waiting times for clients. Some programs with multiple site locations take appointments at some of their sites.
Nearly everyone agreed that having greeters and screeners is important. Sixty percent of programs use greeters at most or all of their sessions. More than half screen their clients at most or all sessions to determine eligibility or assistance needed. The greeters can make clients feel welcome, encourage them to complete the intake forms, and answer basic questions. Screeners determine whether clients qualify for the services and whether they have all the information needed to complete their returns. Some respondents suggested that the greeting room should be separate from the preparation room.
The IRS requires that all VITA tax preparers and reviewers use an IRS (or IRS-approved) intake/interview sheet. More than three-fourths of the programs use the IRS-prepared sheet, while the remainder use interview sheets typically prepared by faculty.
Preparing and reviewing returns: Slightly more than half of the programs train volunteers on effective interviewing techniques. Of those, more than half use IRS training materials exclusively. The remainder use either faculty-prepared materials or some combination of faculty and IRS materials. There was general agreement that interviewing improved with practice.
Nearly all programs have a review process. Most respondents recommended having either a tax professional or a faculty member review tax returns. About one-third of the programs use two or more types of reviewers. Faculty members and other volunteers are the most frequently used reviewers, each being used at more than half of the programs. About one-fourth of the programs use tax professionals or other nonacademic personnel as reviewers.
Three-fourths of the programs use a review checklist. For those using a checklist, about 70% use the IRS-prepared form and the remainder use faculty-prepared checklists. Several respondents suggested that reviewers should sign the checklists. Quality also seems to improve when students are allowed to work in pairs.
Tax software and e-filing: Eighty-five percent of the programs use software to prepare returns. TaxWise, the IRS-supported software, is by far the most popular package and is used by more than 70% of the programs that use tax software. Two-thirds of the programs e-file most or all of their returns, while about one-third mostly or exclusively file paper returns. Although 85% of the programs use software to prepare returns, many respondents felt that TaxWise was somewhat cumbersome. The most important characteristic of tax preparation software was, not surprisingly, “ease of use” or “user friendly.”
International clients: Slightly more than half of the programs serve international clients, which at colleges and universities are typically international students and some scholars. About one-third of the programs have special sessions for international clients only.
Most stated that specialized training is necessary if tax return services are provided for international clients. A few volunteers might be selected to be the experts on international returns. Since most international clients appear to be students, it is important to coordinate with the international student office on campus. For sites that prepare returns for many international students, it was suggested that they should differentiate clients based on country of origin because treaties differ. Many sites have chosen not to provide this service because of its complicated nature.
As noted, survey results are based entirely on responses received from ATA members who are tax and accounting educators. The following section discusses how VITA programs run by accounting educators differ from other VITA programs.
VITA Programs Sponsored by University Accounting Programs
The biggest difference between VITA programs run by accounting educators and other VITA programs is the volunteers themselves. University VITA programs are largely staffed by students with varying degrees of income tax preparation knowledge and experience. In some cases, a significant number of volunteers may never have prepared a tax return for themselves, let alone someone else. A majority of respondents to the 2004 ATA survey attempted to overcome this challenge by restricting their participants to either Beta Alpha Psi students only or accounting majors only. In either case, the majority of volunteers likely have never prepared a tax return for another individual and lack interviewing experience, which are vital skills in dealing with low-income and international students.
A second potentially important difference between university VITA programs and other programs is the nature of their clients. While all VITA programs serve low-income taxpayers, university programs serve a disproportionate number of international students. Although a recent report by the Treasury Inspector General for Tax Administration (TIGTA, Accuracy of Volunteer Tax Returns Is Improving, but Procedures Are Often Not Followed, August 29, 2007) found that less than 2% of all tax returns prepared in 2005 at VITA sites were for international filers (using Form 1040NR, U.S. Nonresident Alien Income Tax Return, or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents), some university VITA programs serve a client base that is more than 50% international filers.
Finally, most university VITA programs are located outside urban areas. More than half of the respondents to the ATA survey indicated that their programs were on campus only. With the closure of most state Taxpayer Assistance Centers by the IRS in recent years, university VITA program coordinators are less likely to have contact with IRS personnel who might provide support services.
Issues and Challenges of Coordinating VITA Sites
Respondents to the 2007 VITA best practices survey consistently mentioned several issues and challenges facing accounting educators coordinating a VITA site. First and foremost was the increasing complexity of the tax laws that apply to low-income individuals and international students. Many respondents mentioned the shortened window between when training materials are received from the IRS and when actual tax preparation begins. (To be fair to the IRS, the federal government’s penchant for enacting tax law changes late in the year often prevents timely dissemination of up-to-date training materials.) The IRS requires volunteers to use its training materials unless faculty-prepared materials are approved in advance, which can take several months. The IRS Link & Learn website (www.irs.gov/app/vita/index.jsp) provides interactive and detailed tax training materials for the students. The material itself can be intimidating to a student without faculty guidance on what is most relevant. For example, the “Foreign Student” material alone comprises 247 pages.
Many respondents mentioned the challenge of achieving quality control at their VITA sites. The IRS continues to increase the paperwork requirements to operate a VITA site. The more diverse and dispersed the site locations, the more critical it is to have dependable site coordinators. When volunteers or site supervisors fail to show up (because of basketball games, exams, etc.), the faculty coordinator may feel the need to step into the breach. This can lead to feelings of frustration and burnout. Many faculty VITA coordinators cited the significant time commitment and lack of administrative support as reasons for discontinuing their participation in the program. In addition, the faculty coordinator often provides the only continuity for the program. If a client subsequently receives a letter from the IRS in the summer after filing season ends, the faculty coordinator likely is the person who will deal with the repercussions.
The availability, or lack thereof, of software programs and computers also presents challenges. In addition, putting procedures in place to protect against identity theft adds a new level of demand to the increasing IRS compliance procedures.
For additional information on the role and benefit of VITA in accounting programs, see Long and Kocakulah, Campus to Clients, “VITA, the MTC and the Modern Accounting Curriculum,” Parts 1 and 2, in the August and November 2007 issues of The Tax Adviser.
Quality Issues with VITA
TIGTA’s increased scrutiny of the VITA program has caused the IRS to put more demands on faculty coordinators to ensure that tax returns prepared at the VITA site are accurate. A key issue is who is going to review the income tax returns before they are sent to the IRS. The more localized the VITA site (for example, one campus site versus many sites), the fewer supervisors are needed to ensure quality control. Keeping more experienced students involved over a number of years can provide relief to the faculty coordinator. Several survey respondents cited the increased need to assume responsibility for the accuracy of every tax return prepared at their site as a reason to discontinue their participation in the program.
More problematic has been the increased demand to follow all IRS procedures required at each site. The TIGTA report noted that volunteers did not consistently use intake sheets and perform the required interview that assists in preparing the intake sheet. In addition, the report noted that some VITA sites either did not always have a quality review process or did not have a process that always included the required procedures.
Pro Bono Work in Universities and Accounting Programs
Despite the increased demands on their time and the perceived lack of administrative support or recognition by their departments or colleges, most respondents to the ATA surveys found their participation in a VITA program to be both personally rewarding and valuable to the students. The VITA program provides faculty coordinators with the opportunity to work with students outside the classroom in “real-world” settings. Most universities, as part of their mission, provide service to their surrounding communities or help students become responsible citizens. The VITA program epitomizes the type of service an accounting program is uniquely qualified to perform. For the majority of faculty coordinators, the VITA program is a labor of love providing intrinsic benefits that overcome the frequent lack of extrinsic benefits.
Prof. Nellen is a former member of the AICPA Tax Division’s Tax Executive Committee and a current member of the AICPA Tax Division’s Individual Income Tax Technical Resource Panel. The authors are all members of the ATA Pro Bono Tax Services Task Force. For more information about this column, contact Prof. Nellen at email@example.com, Prof. Bauman at firstname.lastname@example.org, Prof. Outslay at email@example.com, Prof. Schmidt at firstname.lastname@example.org, or Prof. Weihrich at email@example.com.